Illinois is preparing to hit the bond market even as the budget impasse has dimmed analysts' views of the state's credit worthiness.
Just as if your credit score declined, Illinois' lower rating makes borrowing more expensive.
Republican Gov. Bruce Rauner says he's still going to try to a half a billion dollars worth of bonds Thursday to pay for roads and bridges.
"Cause those are long-term infrastructure projects with long-term investment cycles and long term benefits to them. It's appropriate to do that with long-term bonding. And we are going to do that," he said Tuesday. "Investing in our roads and our bridges and our transportation infrastructure grows our economy, helps us recruit more businesses here and also creates construction jobs."
Treasurer Mike Frerichs, a Democrat, doesn't think that's a good idea, and says he sent Rauner letters to that effect just last week, as well as earlier this year.
"Before we go out and pay inordinate interest rates on bond payments, let's settle our budget first. Let's get our credit rating more in line to where it should be,"he said.
Frerichs offered other warnings too. He says Illinois could miss out on roughly $31 million dollars if the state goes another year without a budget, and says that already -- in the first three months of the calendar year -- Illinois lost out on nearly 8 million dollars of investment income because of the impasse.
Frerichs says that's because it's his duty to make sure that cash is available to pay the state's bills.
"The budget impasse has required my office to alter our preferred investment strategy. Instead of longer-term, higher-yielding investment tools, we've had to move money into shorter-term less lucrative investments," he said.
Frerichs says that means less money for schools, programs to help seniors, and support for those with disabilities.
Despite the ratings dip, Gov. Rauner says he's talked to investors, and they support his plans for the state.
"I've talked to many bond buyers. I know investors," he said. "The bad news is they're fed up with the financial mismanagement of the state of Illinois -- this has been going on for decades: kicking the can on pension payments, kicking the can on paying bills, kicking the can on reforming our, cause they know we need to grow more jobs. Bond buyers want a growing economy with a bigger tax base. That's the bad news. The good news is many of them have indicated confidence in what we're trying to do in our administration. They're supportive of what we're trying to do in our administration. The reforms that we're advocating are supported by investors."
In their notices further downgrading the state's credit ratings last week, neither Moody's or Standard & Poor's directly addressed Rauner's reforms; rather they cited politicians' inability to pass and balance the budget as the main culprit for their actions.